Jordan receives Egyptian gas supplies next month

Egyptian gas supplies are set to resume next month stressing that Cairo’s recent decision to annul its gas agreement with Israel will not affect the Kingdom’s main energy source.

Egyptian gas supplies are set to resume next month, an energy officials said, stressing that Cairo’s recent decision to annul its gas agreement with Israel will not affect the Kingdom’s main energy source.

According to a Ministry of Energy source, Cairo[2] pledged to resume pumping in mid-May during a series of meetings held between Egyptian Petroleum Minister Abdullah Ghorab and then-minister of energy Qutaiba Abu Qura last week. During the meetings, which the source described as “positive”, the two officials reached an “understanding” under which Egypt will initially supply the Kingdom with 150 million cubic feet per day — well below the 220 million cubic feet stipulated in a 14-year gas agreement inked in 2002.

Ghorab reassured Abu Qura that the cancellation of a gas deal with Israel would not affect Jordan’s gas supplies, stressing Cairo’s commitment to honouring the agreement, added the source, who declined to be named. Meanwhile, the Kingdom is in the “final stages” in negotiations over a gas deal with Qatar, according to the source.

The final outstanding issue in these negotiations is the infrastructure required to receive and store liquid gas, which is likely to require the construction of a multimillion-dollar terminal off the Port of Aqaba. “There are many options before us, but we have yet to decide which will be the most cost-efficient and quickest to construct,” the source said.

Although officials have singled out Qatari gas as a short-term answer[3] to the Kingdom’s energy woes, the source acknowledged that supplies will be at “international prices” and costlier than Egyptian gas, which Jordan receives at a below-market rate. Another factor that will determine whether the deal goes through is the productivity of the Risheh gas fields on the Kingdom’s border with Iraq, the source said. Should the initial results of exploration efforts prove favourable in the next week, the government may halt its efforts to secure Qatari gas.

“We would prefer to rely on local sources rather than spending funds on the construction of a gas terminal,” the source noted. Ongoing cuts in Egyptian gas supplies due to a series of acts of sabotage on the 400-kilometre pipeline[4] leading to Israel and Jordan have forced the Kingdom’s power plants onto heavy oil and diesel reserves at a cost of $5 million a day.

In order to meet the growing costs due to the disruptions — forecast to reach JD1.7 billion by the end of the year — authorities are set to raise electricity tariffs next month for the second time in less than a year.